By default the logos are 128x128 pixels and need to be in DDS format. If you use Photoshop, nVidia has a kewl plugin that can export to the DDS format. Otherwise get a DDS converter.

Here's the basics:
1. Find your SMR user data folder. The default location is C:\Documents and Settings\<username>\My Documents\My Games\Sid Meier's Railroads!\. If you have a CustomAssets folder in there then open that and make a Logos folder. (C:\Documents and Settings\<username>\My Documents\My Games\Sid Meier's Railroads!\CustomAssets\Logos)
2. Create your logo image and resize it to 128x128, save it as a DDS file with alpha channel (DXT3 format) into the Logos folder. The filename is important. Make sure it is in the format train_decal_xx.dds where xx is the next number in the logo image sequence. The game ships with 21 logos so the next number would be 22 (train_decal_22.dds)
3. Optionally you can make a specularity image (train_decal_22_spec.dds) but it is not required.